An ICO is somewhat like an initial public offering (IPO). Basically, it is a fundraising tool that trades a new cryptocurrency in exchange for an already existing currency. Instead of listing a share on a designated stock exchange like in an IPO, the company issues newly created coins that they put up for sale at a given price.
Put simply, it is a project funded by liquid money (Bitcoin, Ethereum, or fiat currencies (https://www.investopedia.com/terms/f/fiatmoney.asp)) against a new cryptocoin created specifically for a project. These new coins are called tokens and are basically blockchain-based digital coupons that are tradable from peer to peer in an irreversible way. By purchasing these digital coupons, investors believe in the project's success and the added value coming with their resale.
Traditionally, start-ups and companies can raise money through...